[Congressional Record (Bound Edition), Volume 150 (2004), Part 14]
[House]
[Pages 18841-18847]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2045
                         RECORD DEFICITS ABOUND

  The SPEAKER pro tempore (Mr. McCotter). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from South Carolina (Mr. 
Spratt) is recognized for 60 minutes as the designee of the minority 
leader.
  Mr. SPRATT. Mr. Speaker, in less than 10 days we will close the books 
on fiscal year 2004, and what a year it has been. A few days after that 
we will declare a deficit of $422 billion. You got it, $422 billion.
  Now, there will be all sorts of spin to make that shortfall seem a 
lot less serious than it really is. But here are the hard facts. At 
$422 billion, this year's gift will set an all-time record, $47 billion 
more than last year, which itself last year was the worst deficit on 
record. And at $422 billion this deficit is bad enough; but if you back 
out the surplus in Social Security, as you should, 15 years ago we 
adopted a law and said Social Security shall not be included in the 
regular budget of the United States. It is, after all, a trust fund. 
The money is incumbent for the beneficiaries.
  So if you back out those trust funds and the surplus they incur this 
year, the deficit in the regular budget of the United States is $574 
billion for fiscal year 2004, $574 billion, more than a half trillion 
dollars in debt.
  Now, the President keeps telling us that this economy is on the mend. 
Usually when the economy gets better, the bottom line of the budget 
gets better, but not now. This year's deficit, you see, is not going 
away. It is not even going down by much. Even if the economy improves, 
it will still be about where it is, 4 to $500 billion for the next 10 
years. What we have got, what we are stuck with for the time being 
until we do something about it is what economists call a structural 
deficit. It is built into the texture of the budget itself.
  On the House Committee on the Budget, our Democratic staff has taken 
the latest projection of the deficit and the economy given to us just a 
few days ago by the Congressional Budget Office, CBO, our neutral, 
nonpartisan budget shop. We have taken their forecast, and we have made 
what we regard as political readjustments to it. We have actually 
decreased the war of Afghanistan and Iraq that they have included 
because we do not think and do not hope, certainly, it will continue at 
existing levels. We have assumed that the alternative minimum tax will 
be fixed, as politically it must be fixed over the next several years; 
and we have assumed that the President's tax cuts will be made 
permanent as he earnestly seeks. He will get his way.
  When you do that, you see what happens on this bottom red line which 
starts in 2004 at $422 billion, that is this year's deficit, because 
from 422 to 360, yes, it gets a bit better, we hope, but then it bombs 
out in that range. And by the time you get to the end of this 10-year 
period in 2014, the deficit is $503 billion.
  As I said, the deficit does not go away and it does not go down by 
much; and at the end of the 10-year period it is bigger than it is 
today and we have accumulated a mountain of debt. By our calculation, 
using CBO's forecast, the Federal Government will incur $6,816,000,000 
in additional debt between now and 2014. And when that $6.8 trillion in 
new debt is added to our old debt, which is $7 trillion or thereabouts, 
the total debt of the United States will come to $14,890,000,000 in 
that year.
  If we follow the fiscal course the President has laid down, keep 
implementing his policies, do not make any changes in this budget, we 
are adopting basically his budgetary assumption, that is where we will 
be: $15 trillion in debt by the year 2014. That is the legacy that we 
are leaving our children.
  If this burden were not enough, we always have to remember that out 
there, looming on the horizon, beginning in the year 2008, it is a 
phenomenon called the baby boomers, 77 million of them are marching to 
their retirement as I speak tonight. They have already been born. They 
have already qualified for their retirement benefits, and in 2008 they 
will start drawing their Social Security. In 2011 they will start 
drawing their Medicare.

[[Page 18842]]

In 20 years they will double the number of beneficiaries on Medicare 
and Social Security. And what should we do to prepare for this 
unprecedented demographic event, the doubling of the number of people 
on retirement?
  We should be saving money now, no question about it; in this period 
of time we should be saving money. Instead, we are doing just the 
opposite. We are building up mountains of debt as this chart shows.
  Mr. SCOTT of Virginia. Mr. Speaker, I would ask the gentleman to 
explain what this blue line on the top might be.
  Mr. SPRATT. The blue line on the top is the path plotted by the Bush 
administration in 2001 when they brought us their first budget. They 
said, this is the path that we expect to follow. This was the basic 
baseline of the budget, before the Bush policies that were projected 
back in 2001. That is how good things looked. This is how bad things 
are now 3 short years later.
  Mr. SCOTT of Virginia. I thank the gentleman.
  Mr. SPRATT. Well, I said what we should be doing is saving, paying 
down our debt, not building up our debt.
  Now, some may discover that, some might say, when did the United 
States Government ever pay down any debt? Well, in case you do not know 
it, in 1993, when President Clinton came to office, the deficit was 
right there, $290 billion, a record deficit under the last President 
Bush, $290 billion in 1992. That was the deficit situation President 
Clinton inherited.
  We passed in this House, in the mid-spring of 1993, a deficit 
reduction act that the President sent to us. We passed that bill by one 
vote here in the House and by one vote in the Senate. As a consequence, 
every year after that for the next 8 years, the bottom line of the 
budget got better and better and better to the point where in the year 
2000 we had a surplus of $236 billion. All of that happened on the 
watch and under the administration of the Clinton administration 
because of two major multi-year budgets that we adopted in those years, 
hard votes, probably cost the Democrats control of the House, but we 
did the right thing and there was a payoff, a budget and surplus by an 
unprecedented $236 billion in the year 2000.
  As Yogi Berra likes to say, If you do not believe it, you can look it 
up. It is a matter of national record.
  Well, what has happened since then? This is when President Bush came 
to office. He inherited a surplus. The budget there, midfiscal year 
2001 was in surplus by $127 billion, but every year thereafter the 
bottom line of the budget has gotten worse and worse to the point where 
it is $422 billion in debt today.
  Now, let me show you what those surpluses in the Clinton years meant, 
which was also unprecedented. In those 3 years from 1997 to the year 
2000, that 3-year period of time, the debt of the United States held by 
the public outside the Government went from $3,772,000,000 to 
$3,409,000,000. We paid off in those 3 years $362 billion of debt. If 
you take what was paid off in the year 2001 when President Bush came to 
office and inherited the budget of the previous administration, it is 
over $400 billion in debt reduction.
  By contrast, this administration told us when they came to office in 
2001, their own economists at OMB, Office of Management and Budget and 
CBO both, they told us if you stay this budgetary course, you can pay 
off the debt held by the public; keep doing what the Clinton 
administration has been doing, you can pay off the debt held by the 
public by 2010, 2008 as early as that. But in the foreseeable future, 
if you stick to this budget course, to these fiscal policies, you can 
pay off the debts of the United States and lay the basis of the 
solvency of Social Security, the first big step you can take towards 
making Social Security and Medicare solvent for a long time to come.
  We know the story. The Bush administration did not choose to stay 
that budgetary course. They chose their own budgetary course, which 
called for deep tax cuts, very significant tax cuts; and when the 
budget forecasts did not materialize as expected, those budget cuts, 
those budget tax cuts ate even more deeply into the deficit of the 
United States.
  As a consequence, in the year 2002 instead of paying down more debt, 
we had to increase the national debt of the United States. We had to 
raise the statutory ceiling. There is a statutory limit on the debts 
that we can incur. We had to raise it by $450 billion in the year 2002. 
Next year, having raised it $450 billion, the very next year we had to 
raise the debt ceiling again by $984 billion. Let me tell you 
something, $984 billion is more than the entire debt of the United 
States in 1981 when President Reagan came to office. But we had to 
raise the debt ceiling by that amount in 2004 in order to accommodate 
the increases in debt.
  When you add all of these together, you will see what I have cited 
earlier, the phenomenal increase in debt under this administration. If 
we stay the course we will be going to $14,890,000,000. But already 
with the two debt-ceiling increases passed of 450 plus 984, plus one 
that is pending right now, which is $650 billion, when those three 
debt-ceiling increases are passed, it will come to $2.1 trillion. That 
is the fiscal record of this administration. Compare it to the last 3 
years of the Clinton administration which I have just shown you where 
we paid off $362 billion.
  Mr. ALLEN. Mr. Speaker, I would like to make one point because I 
think it is worth going back to March of 2001 when the President was 
traveling the country pitching the first tax cut, the big tax cut; and 
he came to my hometown, he came to Portland, Maine, and he went to the 
Merrill Auditorium in city hall and he spoke to almost 2,000 people. 
And I remember sitting in the front row and listening to him speak. And 
I will never forget what he said, and this is about as close to word 
for word as you can get. He was selling his tax cut and he said, I know 
these are big numbers, but this is reality we are talking about. We 
hold spending to a 4 percent increase.
  I would say, well, not exactly, because the Department of Defense had 
not submitted its budget yet.
  He went on. We pay down $2 trillion worth of debt.
  Well, only if the whole program works.
  Then he said, We set aside a trillion dollars for contingencies. 
There was no trillion dollars contingency account. They made it up. 
They simply made it up. So all over the country the President went 
around saying we have set aside a trillion dollars for contingencies; 
and then he said in Portland and around the country, and there is still 
money left over. But the hard cold truth was there was no contingency 
account; once the tax cut was passed, once it was signed into law in 
the big ceremony in the Rose Garden, you cannot find the words 
``contingency account.''
  The administration never said as the economy deteriorated and 
spending went up. They never said, boy, thank God we have that trillion 
dollar contingency account to fall back on.
  So right from the beginning, this tax cut was oversold. It was 
oversold. They went out and said things to justify the tax cut when 
they did not have the evidence to support it. And I think it is worth 
remembering that, because it is not easy to dig a 14.8 hole for 
yourself when you are starting at $3.87 billion. In just a few short 
years they have managed to drive this country in a direction where our 
children and grandchildren will be paying a bill for decades to come. I 
would like to come back to that at a later time.
  Mr. PRICE of North Carolina. Mr. Speaker, with an unprecedented 
fiscal meltdown in this country, going from $5.5 trillion in projected 
surplus over the next 10 years to over $3.5 billion in additional debt, 
fiscal turnaround of over $9 trillion, would we not like to think that, 
at least for that degree of damage to the Federal budget, that we have 
gotten the maximum economic stimulus, or that we have at least been 
able to fund our major priorities like education and research and 
health care, transportation? Yet I do not know any economist who will 
claim

[[Page 18843]]

that we have had the best possible economic stimulus or the economic 
turnaround. This is as sluggish an economic recovery as anybody can 
remember.
  Mr. SPRATT. Mr. Speaker, we are one million jobs short to the number 
of jobs we had on March 1, 2001, when the last recession started. It 
was over in November. And we are still a million jobs short of that 
despite the supposed economic stimulus which obviously did not 
stimulate the economy by nearly enough.

                              {time}  2100

  Mr. PRICE of North Carolina. Has the gentleman seen any economic 
analysis that would suggest that a massive tax cut, 43 percent of which 
went to the top 1 percent in earnings, was the most effective economic 
stimulus that could have been applied?
  Mr. SPRATT. That is why we are not seeing the results in jobs.
  Mr. PRICE of North Carolina. Mr. Speaker, the President seems to want 
to claim that, but I have seen analyses, and they are readily 
available, that show there are dozens of things that could be done in 
terms of middle class tax cuts, in terms of infrastructure improvements 
and transportation improvements, in terms of aid to the States that 
were so hard-pressed and still are hard-pressed. Extension of 
unemployment benefits to those who are still trying to turn their 
situation around, any one of those things would not only have been 
fairer in terms of the people affected, but it would have been a far 
more effective stimulus.
  Then to turn to my second point, have we been able to adequately fund 
our major priorities in this country?
  If you are going $450 billion into debt each year, additional debt, 
you would at least like to think you are getting some bang for the buck 
in terms of things we need to be investing in in this country. But yet 
at last report this House cannot even pass a highway bill, cannot even 
agree on investment in our infrastructure, which used to be a no-
brainer around here, both Democrats and Republicans agreeing that 
nothing was better for the economy than having a healthy infrastructure 
and getting money out to the States to build highways and transit 
systems.
  Mr. SPRATT. I thank the gentleman, and let me just wrap up and now 
turn to my other colleagues and yield to them, first by saying or 
asking, how does this administration respond to these dismal results? 
Nobody can put a pretty face on numbers like these, a deficit of $420 
billion, a fiscal course that has led us to nearly $15 trillion in 
debt. Some legacy to leave to our children. In just 10 years, that is 
the course we are on according to CBO, even OMB. How do they respond to 
it?
  Last July when the administration issued, as required by law, its so-
called mid-session review of the budget they actually resolved this. 
When they issued that, they went through the numbers as they projected 
them, put the best face they possibly could on them, and came to the 
conclusion that these deficits were indeed unwelcome. That was the 
strongest word they could muster, that these deficits were unwelcome. 
Did they offer a plan? No. Did they hold out any prospect that this 
deficit would be reduced and that the country would be put back on a 
path of fiscal stability? Not on your life. There is no plan, no 
prospect of it, no shock, no shame and no solution.
  We want to tell you more about the situation we find ourselves in, 
and now I yield to the gentleman from Virginia (Mr. Scott) for that 
purpose.
  Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman for 
yielding to me.
  One of the things that we have found in the debate on the budget is 
you really have to use charts because one side will say the deficit is 
bad; the other side, it is manageable. But when you look at the chart, 
going back to Johnson, Nixon, Ford and Carter, that is the yellow; the 
Reagan and Bush deficits, that is the red; the green, that is the 
Clinton administration; and this is on-budget surplus. That is after 
Social Security and Medicare, and then President Bush. You cannot 
create a chart like this by accident.
  The gentleman from South Carolina pointed out that in 1993 we cast 
tough votes. Not a single Republican in the House or the Senate voted 
for the budget that turned this deficit around, started it up. Now, 
some like to point out that the Republicans had control of the House 
and the Senate during six of the 8 years of the Clinton administration 
and, therefore, deserve some credit for the elimination of the deficit 
and the generation of the surplus. Wrong.
  In 1995, when the Republicans came in, they passed irresponsible 
budgets. President Clinton vetoed them. They threatened to close the 
Government down. He vetoed them again. They closed the Government down, 
rather than allow those deficits to return, and as a result of the 
Presidential vetoes, we maintained the progress towards a surplus. So 
you cannot take credit for those kinds of budgets that were vetoed. In 
fact, we know what would happen if the President had signed those 
budgets because, when President Bush came in, they passed the same kind 
of budget; and we see the total collapse of the budget, record 
deficits, as the gentleman from South Carolina has pointed out, as far 
as the eye can see.
  Now, just to give you an idea of the deterioration of the budget, 
this is the 2004 budget, the budget we are in today. In January 2001, 
when this administration came in, we projected a $390 billion surplus, 
and then the tax cuts and the administration policy was adopted so they 
had to, in May, recalculate. A 274 surplus was projected for this year. 
After September 11, March, almost 6 months after September 11, they 
projected, well, maybe it will be a small little deficit. In March of 
2003, a year later, they recalculated $330 billion in the hole. Last 
month, latest figures, $422 billion in the hole, a deterioration of 
over $800 billion.
  Now, when you use big numbers we like to put them in perspective. You 
add up everybody's individual income tax. The revenue generated from 
the individual income tax across America totaled $800 billion. 
Deterioration in the budget for this year's budget since this 
administration came in, $800 billion deterioration. That is the number.
  When you run up deficits, you run up interest on the national debt. 
As the gentleman from South Carolina pointed out, the interest on the 
national debt, because the debt was headed towards zero, interest on 
the national debt was headed towards zero, but this chart shows the 
interest on the national debt that we are going to have to pay. In 
2009, the difference of what we thought we are going to have to pay and 
what we have to pay, over $300 billion, and let us put that number in 
perspective.
  At $30,000 each, how many people can you hire with $300 billion? 
Answer: 10 million. Another question: How many people are drawing 
unemployment in America today? How many people are unemployed, drawing 
unemployment today in America? Answer: less than 9 million. You could 
hire everybody with a $30,000 job that is on unemployment and have 
billions of dollars left over with the additional interest on the 
national debt.
  We cannot fund No Child Left Behind for the lack of $9 billion. We 
cannot fully fund veterans health care the way it should be funded. 
There are a lot of things we cannot do because we do not have the 
money. $300 billion, interest on the national debt.
  This has national security implications, too, because a lot of that 
debt is bought by foreign countries, and you cannot negotiate a trade 
deal with somebody who has got $100 billion of your paper, China, 
Japan, other countries. It has national security implications. If 
somebody wanted to start building nuclear weapons and they are buying 
all of our debt, what kind of negotiations could we have?
  Interest on the national debt is run up because of the fiscal 
irresponsibility of this administration. We were told that we had to go 
into that kind of fiscal collapse to create jobs. We have heard this 
administration, and in fact, we had a member of the other party 
bragging about the success of this administration creating jobs just 
this afternoon. This chart shows what the actual numbers are, the 
percentage increase or decrease in jobs, going back to Herbert Hoover. 
Herbert Hoover lost

[[Page 18844]]

jobs. Every other administration since then, before this 
administration, gained jobs. This administration lost jobs.
  Now, this is the chart. So that there is no confusion, this is the 
private sector job growth since Herbert Hoover. Now we will notice 
before we come up with the excuses that this time frame includes not 
only World War II and the Korean War and the Vietnam War and the Cold 
War and the hostages in Iran, Persian Gulf War, Somalia, Grenada, it 
also includes Pearl Harbor. Everybody back to that period of time 
created jobs. This administration did not. So 9/11 could not have 
caused this chart, and neither could the so-called inherited recession.
  First of all, let us get the facts straight. The recession started in 
March 2001, well after this administration had been sworn in, well 
after they had been elected and their policies were becoming part of 
the economy, which was reacting to their articulated policies; but 
whenever it occurred, this chart shows how many jobs you have 40 months 
after the beginning of a recession. Everybody is up to 3.8 percent, 1.9 
percent. 1990 to 1993 is the worst before this administration. 
Everybody else 2, 3, 4, 7 percent more jobs, 40 months after a 
recession began until you get to this administration. So whenever this 
recession started, you cannot blame that recession for the collapse in 
the economy.
  One of the things that we pointed out is that we ought to be saving 
money because the baby boomers will retire. The blue bars show that we 
are bringing in more money in Social Security. The Medicare chart shows 
the same pattern; but after 2017, you will be paying out more money in 
Social Security than we are bringing in, and you cross the 300 line, 
that is $300 billion. That is $2,000 for every man, woman and child in 
America.
  Obviously, this is a very challenging chart to deal with until you 
look at this chart, which shows that if you add up all of the 
President's tax cuts and reduce them to present value so we know what 
we are talking about, that is more than the combined total deficit in 
Social Security plus the combined deficit in Medicare for as far as the 
eye can see, 75 years or more.
  In other words, we had a choice. We could make Social Security and 
Medicare solvent, or we could cut taxes. We had a choice. It was about 
the same amount of money. We cut taxes. We created the deficit, and now 
we do not know how we are going to pay for Social Security and 
Medicare.
  In fact, the GAO produced a chart that answers the question, if you 
do not change directions you might end up where you are headed. Where 
are we headed? This chart shows the line across is the revenue coming 
in at the President's policies. This shows right now we are borrowing 
money for some Government spending; but by 2040, we will have enough 
money for the blue, which is interest on the national debt, a little 
bit of money for Social Security. We will have to borrow the rest of 
the money for Social Security, no money for Medicare or Medicaid, and 
no money for the green which is Government spending like defense, 
transportation and everything else.
  Obviously, this is not sustainable. We have to do something and make 
profound changes in our economy, in our funding, in balancing the 
budget; and it is not going to be done with rhetoric and constitutional 
amendments.
  We are tomorrow marking up a constitutional amendment to so-called 
``balance the budget,'' the balanced budget amendment. What they do not 
tell you is that the amendment does not require a balanced budget. It 
just prescribes the method for passing a budget that is not balanced. 
We had a hearing on that, and we asked the Republican witnesses whether 
or not it would be more likely or less likely that you would actually 
have a balanced budget if that legislation was adopted. They could not 
give a definitive answer to that question.

                              {time}  2115

  The fact of the matter is it would make it less likely that you would 
pass a good deficit reduction plan because you made it more difficult. 
So even if that legislation were to pass, and it will not because 
people know what a fraud it is, it will not, but even if it passed, you 
would still, at some time or another, have to cast the tough votes.
  When we were fixing the deficit, eliminating the deficit, we had a 
rule called PAYGO, pay-go, pay as you go. If you want to increase 
spending, you have to increase taxes or cut spending to pay for it. If 
you want to cut taxes, you either have to cut spending or increase 
somebody else's taxes to pay for it. You could not have any initiative 
that had an adverse effect on the budget without paying for it.
  Well, right after this administration came in, that policy evaporated 
and they passed tax cuts without paying for it. They passed other 
programs without paying for it. And all of the red ink, interest on the 
national debt in this chart, is a direct result of that policy.
  Mr. ALLEN. Mr. Speaker, if the gentleman from Virginia will yield, I 
want to follow up on the gentleman's comments about the consequences of 
running these huge deficits, because we have the numbers now. We know 
where the Federal budget is headed, and it is not a pretty picture. But 
there are some very serious consequences. I wanted to mention several.
  First of all, Social Security, when you look at the administration's 
budget over the next 10 years, they spend, on general government 
purposes, every single dollar of the social security's surplus. And the 
Social Security surplus for the next 10 years may be quite substantial. 
So, every single dollar. Then we have Alan Greenspan turning around and 
saying, oh, we have long-term problems with Social Security. We really 
should be reducing Social Security benefits. And there is the President 
of the United States saying, what we really need to do is to create 
individual accounts, which is another way of saying we need to reduce 
Social Security benefits. They both come to the same thing.
  So the first impact is on Social Security, and it could be absolutely 
devastating. But the second impact goes to the question that I think 
the gentleman was raising about are these tax cuts effective. We have 
now had 4 years of an administration doing three rounds of tax cuts. If 
you judge an economy by jobs and wages and health care, then let us 
first look at jobs.
  As the gentleman pointed out, we are down about a million private 
sector jobs over the 4 years. No job recovery. Worst record since 
Herbert Hoover. Clearly, jobs have not come back despite the three tax 
cuts.
  Mr. SCOTT of Virginia. Mr. Speaker, if the gentleman will let me 
respond to the point on jobs, and the gentleman from North Carolina 
alluded to it, it is absolutely incredible that we could run all this 
red ink without creating jobs. At least when President Reagan was 
running up deficits he was creating jobs. It is difficult to cut taxes 
the way the administration has cut taxes, in those amounts, without 
creating some jobs. But the taxes they cut were the kinds of taxes that 
did not stimulate the economy. It only rewarded those in the very upper 
income, the ones least likely to actually spend it.
  If you want to stimulate the economy, give the money to those who 
will actually spend it. The gentleman from North Carolina mentioned 
extending unemployment benefits. People who had jobs, who lost a job 
and are continuing to look for a job but have not found one yet, their 
unemployment benefits have run out. If you give them some money, they 
will spend it right away. If you give a cut on dividends to someone who 
has substantial stock holdings already, if you cut tax and dividends in 
half and someone benefits $300, if you do the arithmetic they must have 
had, on average, $100,000 in stock. Three hundred dollars to them, if 
they wanted to buy something that cost $300 and they have a $100,000 
stock portfolio, they would have already bought it.
  If they wanted a television, they would already have bought the 
television. The $300 tax cut does not stimulate the economy, given 
there. But if you give it to a family with children,

[[Page 18845]]

unemployed, low income, they are going to spend the money.
  There are a lot of ways you can cut taxes and create many jobs, as 
President Reagan did, but if you cut the taxes that President Bush cut, 
which ruined the economy, ruined the budget and lost jobs, it is 
incredible how you can run up the deficits. And just the interest on 
the national deficit in 2009, in that year, if we did not have the 
kinds of increased interest on the national debt, we could hire 10 
million people at $30,000 apiece, which would be more than anybody has 
created in 4 years. Ten million would be setting records. We could do 
that in 1 year with just the interest, each and every year, with the 
interest on the national debt that we are going to have to pay over and 
above what we expected to pay when this administration came in.
  Mr. ALLEN. Mr. Speaker, if the gentleman will yield further, that is 
a very good point, and it goes to the second point I was going to make 
about wages.
  The median wage in this country now has dipped down slightly in these 
last 4 years. And if we look at health care, a third component of 
whether or not we are in a healthy economy or not, there are 5 million 
more Americans who do not have health insurance today. We are at 45 
million instead of the 40 million uninsured when George Bush took 
office.
  So there has been deterioration across the board. And the worst is 
yet to come, because the Office of Management and Budget has a 
memorandum out there and that makes it very clear that in the 2006 
budget, which is coming right down in front of us, there are going to 
be deep cuts in many government services, including cuts to education, 
veterans' health care, environmental protection, job training and child 
care.
  The last thing that I personally wanted to say about this is that I 
have been thinking a lot about my father's generation. My parents are 
both gone now, but they went through the depression and the Second 
World War, and a lot of people did not come through the Second World 
War. The guiding principle of my parents and their whole generation, I 
believe, was to make sure their children and grandchildren had more 
opportunity than they did. They sacrificed a lot that might have been 
for their own immediate pleasure in order to be sure their kids had a 
good education and that we had opportunities that they had not had when 
they were growing up. That generation would never have done to us what 
the Bush administration and the congressional Republicans are doing to 
our children and grandchildren, sticking them with a debt that is so 
large that they will be paying exorbitant interest on the national debt 
for decades to come; and seeing cuts in education, cuts in job 
training, cuts to the Small Business Administration, the squeezing of 
economic opportunity out of this country because of fiscal policies 
that are essentially tax cuts today and a billion dollars for Iraq 
every week.
  The guiding philosophy that was expressed by the majority leader, the 
gentleman from Texas (Mr. DeLay), when we were debating last year the 
March 2003 tax cut, he said ``Nothing is more important in a time of 
war than cutting taxes.'' In other words, stick it to our kids. Force 
them to pay for the Iraq war and force them to pay for tax cuts for the 
wealthiest 1 percent in America. It is an embarrassment. It is an 
absolute embarrassment, it is wrong and, as I said before, the greatest 
generation, the World War II generation, would never have done to us 
what George Bush and the congressional Republicans are doing to our 
children and grandchildren.
  Mr. SCOTT of Virginia. And, Mr. Speaker, the most unseemly part of 
what is going on is, as the interest on the national debt gets bigger 
and bigger, and, as I earlier indicated, the individual income tax only 
generates about $800 billion, we are paying $200 billion, $300 billion, 
$350 billion more in interest on the national debt and growing right at 
the time when the Social Security Trust Fund is going to be running the 
big, bigger, and bigger deficits, we have to assume that this 
administration has no intention of paying Social Security after 2017.
  Mr. PRICE of North Carolina. Mr. Speaker, if the gentleman from 
Virginia will yield, I am struck by what our colleague from Maine has 
been saying about the national debt and the burden it represents on 
future generations.
  We have had a discussion tonight that may strike some people as 
pretty complicated, with a lot of charts and figures. And sometimes we 
are criticized for not being able to reduce our arguments to a bumper 
sticker. Well, I have a couple of bumper stickers to suggest that I 
think sum up just what the gentleman from Maine and the gentleman from 
Virginia have been saying.
  People like having that bumper sticker on the car about having an 
honor student at so-and-so high school. How about this one? ``My honor 
student will be paying for the Bush national debt.'' Or how about 
another one. ``George W. Bush: We will be forever in his debt.''
  That is what we are talking about here. We are talking about an 
administration that has managed to engineer a $9.5 trillion fiscal 
reversal. And I appreciate the gentleman pointing out so competently 
the dimensions of that and exactly what it does portend for future 
generations.
  Mr. SCOTT of Virginia. I thank the gentleman.
  And the interest on the national debt that has to be paid, people 
have a sense that when you started charging things on your credit card, 
the minimum payment does not hurt you too much, until you start running 
up to where that minimum payment starts hurting. We are paying interest 
on the national debt at levels that rival the defense budget.
  The defense budget this year is what, around $400 billion?
  Mr. SPRATT. Four hundred twenty billion.
  Mr. SCOTT of Virginia. Four hundred twenty billion dollars. The 2009 
interest on the national debt is $316 billion over and above what we 
expected it to be. These are numbers which mean that later on we will 
not be able to do the kinds of things that we want to do.
  We had projected surpluses in the hundreds of billions of dollars, 
which meant that we would be able to afford health care for the 
uninsured, education, college education, and veterans' benefits, 
including health care. The kinds of things that are real priorities. 
This year's budget did not have enough money in it to maintain present 
services for our veterans in health care. The veterans' groups wrote 
letters criticizing what we were doing, and yet we did not have the 
money because we are running up additional interest on the national 
debt.
  We have a lot of priorities we are not able to meet, and the interest 
on the national debt gets larger and larger and larger and starts 
hitting us at exactly the same time when the Social Security surplus 
evaporates.
  Mr. SPRATT. Mr. Speaker, I would like now to yield to the gentlewoman 
from Nevada (Ms. Berkley).
  Ms. BERKLEY. Mr. Speaker, I thank the gentleman for yielding to me, 
and I appreciate the opportunity to share some of my thoughts with my 
colleagues, because I thought when President Bush took office, he 
promised to maintain the projected budget surplus. He promised to pay 
off the national debt and help the middle class working Americans. 
Instead, what I have seen is his policies have led to record deficits, 
increased Federal debt, and have put a squeeze on the middle class. 
These failed policies burden all Americans and endanger the future of 
hardworking families in Nevada and throughout this Nation.
  When President Bush took office in January of 2001, the Congressional 
Budget Office projected a 10-year, $5.6 trillion surplus. Because of 
the irresponsible and failed economic policies of the Bush 
administration and the congressional Republicans, we can now expect a 
10-year $3.5 trillion budget deficit. This is a $9 trillion, dare I say 
it, dare I use the word, flip-flop.
  This year's deficit alone is a record $422 billion, the largest 
deficit in this Nation's history. We have gone from one of the largest 
budget surpluses in our Nation's history to the worst deficit our 
Nation has ever seen. And it

[[Page 18846]]

does not matter what these neoRepublican economists are now saying. The 
facts are deficits matter.
  Federal deficits directly affect every American. Higher deficits mean 
increased interest rates, higher car payments and rising mortgage 
costs. If the deficits continue the way they are, mortgage rates could 
go back to where they were in the 1980s, through the roof, making the 
dream of American home ownership virtually impossible for working 
families in this country. If interest rates rise by just 1 percent, 1 
percent, homeowners will pay an additional $1,200 in interest payments 
every year for a typical $150,000, 30-year, fixed-rate mortgage.

                              {time}  2130

  Mountings deficits have also increased the Federal debt. The Federal 
debt was $6.7 trillion at the end of 2003. By the way this 
administration is going, the debt is going to be over $14 trillion in 
another 10 years. The Bush administration's solution to this 
skyrocketing debt, just raise the national debt ceiling for the third 
year in a row.
  So what does an increase in the Federal debt mean to the people we 
represent? This year, Americans will spend $159 billion, an average of 
$4,400 per family, to pay the interest on the debt. Our constituents, 
the good people of Nevada, South Carolina and Virginia, want to spend 
their money on something else other than paying off the national debt. 
How about paying down their credit cards? How about paying their own 
student loans or house payments?
  And how far is this President willing to go? How much more will this 
President drain from American families. How long are we going to put up 
with his fiscal foolishness and irresponsibility?
  The Bush administration and congressional Republicans have had plenty 
of opportunities to fix this financial mess. They have not. They have 
refused to require spending offsets for new tax cuts as well as for new 
spending. We call this PAYGO, and it is essential to restoring this 
country's fiscal health.
  In the 1990s, PAYGO led to budget surpluses and the largest economic 
expansion in this Nation since World War II, and it is hard to imagine 
responsible leaders rejecting this proven and successful budget policy. 
PAYGO, what is it? It is simple, we do not spend what we do not have. 
You pay as you go. It makes sense to everybody else except President 
Bush and the Republican leadership in Congress.
  This administration and this Republican Congress are failing American 
families by failing to address our growing deficits. The first of 77 
million baby boomers will be collecting Social Security benefits in 
less than 4 years and Medicare in less than 7. We should be preparing 
now by saving more and getting our Nation's economic house in order. 
Are we doing it? No we are not. President Bush and the Republican 
Congress are closing the door on a house on fire. They are running up 
the biggest deficits in history, no planning, no savings, no economic 
strategy, just reckless, foolish borrowing and spending.
  To make matters worse, the Bush administration and Republican leaders 
are pushing for new tax cuts for corporations and for people who do not 
need more tax cuts. New tax cuts are not the solution. In 2004, this 
past year, 46 percent of Nevada taxpayers, the people I represent, 
received a tax break of less than $100, and what did Nevadans get for 
this $100?
  Since President Bush took office, health care costs for families have 
risen $793; college tuition and fees have increased over $1,200; and 
gas prices have gone up an average of 33 percent. The average Nevada 
family now spends $495 more this year on gas than they did when 
President Bush took office. A $100 tax break barely dents the 
skyrocketing cost of living.
  It is time for President Bush and Republicans in Congress to address 
the enormous financial burdens these growing deficits are placing on 
us. It is time to stop turning a blind eye to the burdens their failed 
policies will place on our children. It is time the American people 
hold President Bush and the Republican Congress accountable. I do not 
know what we have to do to make the American public wake up and see 
what is going on because night after night, day after day, we stand 
here, and we tell the American public what is going on and what is 
going to happen, and until we realize the seriousness of these deficits 
and the foolishness of this administration's fiscal policy, I fear that 
we are going to be in a world of hurt when this is all over.
  Mr. SPRATT. Mr. Speaker, I yield to the gentleman from Virginia (Mr. 
Moran).
  Mr. MORAN of Virginia. Mr. Speaker, I thank the gentleman from South 
Carolina (Mr. Spratt), the ranking member on the Committee on the 
Budget.
  The people in the audience may wonder, what is the problem? Why are 
you getting so excited about this issue? Well, the problem is that, 
within another couple weeks, this fiscal year will have concluded, and 
according to the White House, the Congressional Budget Office and 
pretty much anyone who studies these numbers, we will have spent $422 
billion more than we took in, a $422 billion deficit.
  Now when President Bush took office, they estimated for this fiscal 
year we would have a $397 billion surplus. So, more than an $800 
billion reversal has occurred just this year. The real impact is not 
going to be felt so much by the Members of Congress, those of us in our 
fifties and sixties, some of us; the real impact is on those who are in 
their twenties and thirties or just starting out raising a family, 
acquiring a home, looking forward to a bright future.
  I do not think there has been any generation that has left a more 
challenging future for its children than our generation, the baby boom 
generation. It did not have to happen. But when Members consider a $422 
billion deficit, that is 132,000 times more than the average young 
person is ever going to earn in their lifetime. It is an enormous 
figure.
  Of course, all that contributes to a cumulative debt. It will be $6.7 
trillion. And given the policies that the majority has put into place, 
recommended by the President, it will be a $13.3 trillion public debt 
by 2014, in 10 years.
  Again, not our problem for those in the baby boom generation who will 
be retiring, doubling the number of people dependent on Social Security 
and Medicare; it will be primarily the problem of the next generation. 
But imagine what fiscal irresponsibility, to take all of the political 
credit for cutting taxes, for giving people everything they want and 
then passing the bill on to our children.
  This election, in fact, I would suggest is really about that next 
generation. Even though they may not be the ones primarily voting, they 
are going to be the ones most adversely affected.
  We had a hearing just last week. The gentleman from South Carolina 
(Mr. Spratt) convened it. We brought in some young people that very 
well represented their age group, and we shared with them some numbers, 
that, in fact, the average college graduate now has a debt of $19,000. 
That is a student loan debt of $19,000. People in their twenties face 
an unemployment rate of 9 percent and a third lack health insurance. 
So, obviously, there is going to need to be more investment in 
education and making higher education more affordable, more investment 
in health care, making health insurance more affordable for the working 
class.
  Clearly, there is a need to keep interest rates down, and yet what is 
going to happen, according to the Congressional Budget Office, if we 
make permanent all of these tax cuts, if we keep spending on defense 
primarily, but if we keep spending at the rate that this administration 
and the House and the Senate of the same political party obviously have 
been spending, and those are reasonable assumptions, that within a 
little more than a decade, there are only going to be three programs in 
the Federal Government; there will be Social Security, Medicare and 
defense, and interest on the public debt.
  That interest we estimate, by 2014, is going to be $350 billion, more 
than a thousand dollars per person, and if the

[[Page 18847]]

President's policies are all implemented as he wants, it will be over 
$400 billion per year for nothing, to pay off the interest on the debt 
that the next generation's parents incurred. And they are going to get 
nothing back.
  Where are they going to find the money to educate their own children 
and make health insurance affordable? Where are they going to find the 
money to send their kids on to college? I do not know. I do not know 
where they find the money for public transportation, health research or 
any of the things that have made this country great, but those are the 
issues that this deficit is all about. That is why we are making such a 
big deal about it. It is so wrong, so irresponsible.
  We will have spent a couple hundred billion dollars in Iraq. We will 
have spent money on homeland security, maybe $30 billion a year. But 
those are not the principal reasons we have the deficit. About 60 
percent of this deficit, way over the majority of the deficit, is 
attributable to tax cuts, to a policy that has been irresponsible from 
the very beginning. There is nothing wrong with giving people child tax 
credits. There is nothing wrong with accelerating depreciation in plant 
and equipment and so on, but there is something wrong when the average 
20-year-old gets about $300 from a tax cut, and that is about 1 percent 
of what millionaires will get out of this tax cut. That is wrong.
  This tax cut did not go to those people who needed it the most; it 
went to those people who needed it the least. And it is so doubly wrong 
to be paying for it on the backs of the working class by borrowing from 
Social Security and Medicare trust funds, by sending the debt to our 
children's generation and then retiring on Social Security and 
Medicare, leaving them to pay for our Social Security and medical 
costs, leaving them to pay the interest on the debt we accumulated and 
leaving them with virtually no resources to invest in their own 
children's education, health care, transportation, law enforcement and 
the like. It is just unbelievable how irresponsible this economic 
policy has been.
  We would never treat our own children like this, but somehow, as a 
country, despite all our rhetoric to the contrary, this body has left a 
debt on the backs of our children that we know they can never, ever 
recover from, and it did not have to happen. That is why we are on the 
floor today urging this administration, urging this House of 
Representatives to do the right thing, not to continue to make 
permanent tax cuts that cannot be paid for, that are not necessary to 
stimulating this economy; not to continue a policy that is based upon 
turning the debt over to the next generation. It is irresponsible, it 
is un-American, and it is wrong.
  Mr. SPRATT. Mr. Speaker, I thank the gentleman from Virginia (Mr. 
Moran) for his eloquent remarks. That is the reason we took advantage 
of this Special Order, to call attention to this problem. It should be 
a problem of national concern, a call to action.
  Here we are 9 days before the end of the fiscal year, and we do not 
even have a budget for next year, much less a multi-year budget like 
those we adopted in 1990, 1993 and 1997 and finally brought the deficit 
to heel. We do not have any of the implements in place to deal with 
this monumental problem, even though we proved in the 1990s that those 
implements, like the PAYGO rule, the discretionary spending ceiling and 
sequestration were useful tools and could actually turn the budget 
around from a deficit of $290 billion in 1992 to a surplus of $236 
billion in 1998. That actually happened, and it can happen again if 
there is leadership coupled with the right process and procedures in 
this House, and we do not have them at all.
  We do not even have enough consensus under the Republican leadership 
of this House and Senate to develop a budget for next year, much less a 
budget for the next 5 years. We will never do it. If there is anything 
learned from the 1990s, we will never do it ad hoc. Indeed, the biggest 
enemy I have often said of deficit reduction is something we call 
disaggregation, breaking the process up into so many pieces that nobody 
ever gets a full picture of what is happening even though it is a 
monumental process.
  So here I stand, 9 days before the end of the fiscal year. We thought 
it was an appropriate time to call attention to the record of this 
year, the record debt, and to the fact there is no prospect for dealing 
with this in 2005 at all.
  Mr. MORAN of Virginia. Mr. Speaker, I thank the gentleman from South 
Carolina (Mr. Spratt) for clarifying the context in which this Special 
Order was made. I know that the gentleman supported President Bush, the 
41st President's policy of PAYGO. If we are going to cut taxes, we have 
to show how we are going to pay for it.

                              {time}  2145

  We have got to balance the budget. President Bush the 41st set us on 
to that path of fiscal responsibility. President Clinton, in the 1993 
Balanced Budget Act, made it work. He put tight spending limits. He 
made sure that if we cut taxes, then we are going to offset it so that 
we can continue to keep that balanced budget. And, boy, it worked. For 
8 years it worked. And I know how strongly our ranking member on the 
Committee on the Budget supported that policy.
  But now I know that the ranking member has supported just as strongly 
trying to sustain that policy; and yet for some reason, the other side, 
apparently, the majority of this Congress, feels that that policy, even 
as successful as it was, should not be continued.
  Mr. SPRATT. Mr. Speaker, reclaiming my time, to wrap it up, looking 
back, we started off talking about the deficit and accumulation of 
debt. Here is what we have accomplished, this Congress and this 
administration, in 3 years:
  The first year, instead of paying down the debt as the Clinton 
administration had done for 3 years in a row, they raised the debt 
ceiling by $450 billion. That was good for just 1 year. The next year, 
2003, they raised the debt ceiling again by $984 billion, the biggest 
increase ever; and it has lasted for 15 months. Waiting in the wings 
right now is another debt ceiling increase of $690 billion; and what it 
is waiting on is a bill to which it can be attached, a vehicle that can 
carry it to passage with as few fingerprints on it as possible because 
nobody wants to be responsible for passing that kind of debt ceiling 
increase.
  So the Treasury is reduced to engaging in a lot of gimmicks with 
Federal retirement funds, for example, in order that we can tie things 
over until finally that debt-ceiling increase can be passed. In 3 years 
we will have raised the debt ceiling by $2.1 trillion. Compare that to 
the previous 8 years, and it is a phenomenal and depressing reversal.
  I thank the gentleman for his participation and his eloquent 
comments.

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